Friday, October 11, 2013

The Ferg-beast attacks

I'm breaking my blogging hiatus to briefly respond to Niall Ferguson, not because I'm mad, but because it's fun. For those who haven't seen it, Ferguson has posted a massive three-part rant (part 1, part 2, part 3) in which he attempts to take Paul Krugman to task for making wrong predictions, for being a big meanie, etc. etc. The series is titled "Krugtron the Invincible", after my blog post of the same name. In fact, Ferguson references me in part 1 of his rant:

The resemblance between Krugman and Voltron was suggested by one of the gaggle of bloggers who are to Krugman what Egyptian plovers are to crocodiles.

For too long, Paul Krugman has exploited his authority as an award-winning economist and his power as a New York Times columnist to heap opprobrium on anyone who ventures to disagree with him. Along the way, he has acquired a claque of like-minded bloggers who play a sinister game of tag with him, endorsing his attacks and adding vitriol of their own. I would like to name and shame in this context Dean Baker, Josh Barro, Brad DeLong, Matthew O'Brien, Noah Smith, Matthew Yglesias and Justin Wolfers. Krugman and his acolytes evidently relish the viciousness of their attacks, priding themselves on the crassness of their language.

Having been named, but not successfully shamed, I feel I ought to make a few points in response:

1. The Egyptian plover does not, in fact, eat meat out of the mouths of Nile crocodiles. That is a myth.

2. Ferguson attempts to peg me as a Krugman yes-man. This is lazy and uninformed on his part, since everyone who reads my blog or Twitter feed knows that I am a Brad DeLong yes-man, not a Krugman yes-man.

3. Some of Krugman's critics have good points. Others seem driven mainly by personal dislike for Krugman's polemical style or liberal politics. But a few seem to be motivated by a peculiar type of intellectual inferiority complex. They seem to believe that by catching a famous "smart guy" like Krugman making a mistake, they can prove themselves to be highly intelligent. Naturally, this doesn't actually work. Ferguson should worry about whether he falls into this latter category of Krugman detractors.

4. Of course, there is a fourth reason for criticizing a public intellectual: pure enjoyment. Ferguson seems too angry and bitter for his Krugman-bashing to be motivated by pure fun, but my own occasional Ferguson-bashing (see here and here) was motivated each time by the peculiar glee that comes from giving a really bad article the thorough point-by-point thrashing that it deserved.

5. My advice to Ferguson would be: Unless you're aiming for your legacy as a public intellectual to be "that British guy who constantly went after Paul Krugman", I'd suggest finding something else to write about. History, for example. I hear you're a very good historian.

100 comments:

Actually, by the transitive property, if you are a Brad DeLong yes-man you are a Paul Krugman yes-man: http://delong.typepad.com/sdj/2009/05/this-is-getting-damned-annoying-will-i-ever-be-allowed-to-disagree-with-paul-krugman-again-about-anything-niall-ferguson-e.html

Near as I can tell (primary source is a pamphlet that came with a tartan neck tie,) Ferguson was once MacPhergus. I assume the honoured ancestors Anglicized it at some point to hide. It appears not to have worked and we were run out to make room for sheep. All Fergusons, however smart we may be, cannot escape having lost a fight with sheep.

Niall Ferguson is a man on a moral crusade. A bizarre and misguided moral crusade. He doesn't want to leave our descendants — who will almost surely benefit from vast leaps science, computing, energy and technology and and thus will likely be far wealthier than us — with the bill for our spending habits even though tens of millions of people are out of work and trillions of dollars of capital are not deployed. But Ferguson cares not for our present woes. He's panicking about the fates of our wealthier descendants in an imagined future debt crisis — even though the British government once sustained and paid down 250% debt-to-GDP on a gold standard. It seems to me he has the German condition (for lack of a better phrase) in which debt is schuld, or guilt and austerity is penitence for sin.

Krugtron the Invincible reminds me of Samuelson the Omniscient..."The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and thrive."

Can I just add that trying to label Dean Baker, Josh Barro, Brad DeLong, Matthew O'Brien, Noah Smith, Matthew Yglesias and Justin Wolfers as a bunch of Krugman "acolytes" is just bizarre? It's like he's never bothered to actually read their stuff. I guess they (probably) agree on big points like George W. Bush sucked and default would be bad. But I mean, come on.

I think having "read their stuff" is not one of Ferguson's strong points. He's certainly not read enough of Krugman's stuff to see where he admits and/or analyzes where he made mistakes-- not least on issues surrounding the Euro, that Ferguson (derivatively) obsesses about.

This is how I assume Niall Ferguson sees himself. The boy is innocent American right wigners and the Wolf is evil liberal zombie army of communists and meanies http://www.youtube.com/watch?v=rNzPsfnN3sU

Its funny because Krugman takes himself too seriously and cannot take a joke or criticism. He has also made numerous incorrect predictions and dubious statements such as the govt. shutdown being bad for the economy (like the 1996 shutdown there's no evidence this one has hurt), that unemployment would rise without more stimulus (it's falling), that the sequester would hurt the economy (it didn't), that we're in a depression/crisis (we're not), misinterpreting the liquidity crisis as being demand-side instead of supply side etc

Krugman has a long history of prophetizing doom if things don't go his wayhttp://consultingbyrpm.com/blog/2013/09/another-bang-up-prediction-from-krugman-on-employment-and-the-sequester.html In 2003, in opposition to Bush tax cuts he warned, the United States was heading for a fiscal train wreck.Obviously that didn't happen.

'In 2003, in opposition to Bush tax cuts he warned, the United States was heading for a fiscal train wreck. Obviously that didn't happen."

Seriously, is that a joke?

Isn't Ferguson saying we have a fiscal train wreck? Isn’t it obvious that a huge share of our fiscal problems are from the tax cut? Please don’t be an idiot and say no.

And further, did you think anyone would seriously expect to troll through 20 years of predictions and not find one that did turn out exactly right? No one, not even Krugtron can predict the future. How could that standard of perfection ever be the basis for trying to select who is more informed and more likely to help in any given situation? Did every hall of fame coach win every game? Lombardi didn't, though he was a damn fine coach.

You have to look at the overall work. You have to look at who seems to be more intellectually honest. If you are so wrapped up in your ideology and subsumed by your own confirmation bias that you can only see Krugman's incorrect predictions but have explained away how he has been correct time after time after time, especially in these conflicts with the (I'm sorry) buffoonish wacko Niall, then peace be with brother, but you're useless.

Your snark is pretty subtle...though you do make it clear you're joking with "(i)n 2003, in opposition to Bush tax cuts (Krugman) warned, the United States was heading for a fiscal train wreck. Obviously that didn't happen." Deliciously viciously put.

Someone, whom I am too lazy to look up, did a tabulation of the predictions made by various pundits and followed up on them in a systematic way. Krugman did far better than anyone else. Citing individual mistakes doesn't change that.Moreover, Krugman has been willing to acknowledge and correct errors. This is in drastic contrast to Fergie. Of course, when you're right as often as Krugman it tends to take the sting out of the occasional error. Even Jove nods.

I have been a Krugman reader for some time. My recollection is that he did not say that unemployment would rise given the insufficient size of the stimulus. Rather, I think he said it would not go down enough given the insufficient size of the stimulus. There is a world of difference between those two statements.

Second, Kugman's arguments are usually posited as false dichotomies that preclude the possibility of him being wrong; for example, countries that thrived post 2008 did so because of socialist policies and those that didn't wen't socialist enough. There are exceptions, most notably the USA, which has thrived compared to the European countries despite a much smaller social safety net.

A Niall noted, he was also wrong numerous times about the Euro collapsing and the dissolution of the Eurozone.

That's weak. The Eurozone isn't exactly thriving right now, precisely because of the austerity measures urged by anti keynesians. Krugman warned this would weaken the euro fringe and devastate their economies, and might cause them to leave. So devastation happened , they didn't leave — and this, apparently, is the best Ferguson can do to show that Krugman is somehow wrong? As I said, weak.

"precisely because of the austerity measures urged by anti keynesian" Again this may not be so precise. this is the fallacy of false choice. There are other possible reasons for failing to thrive such as poor demographics, sluggish innovation, high taxes, regulation etc.

No, eurozone is devastated because it suffers from lack of energy, it's no coincidence that France led a war against Libya at the height of euro crisis in 2011. Meanwhile Krugman's policy has caused US to blow a credit bubble of catastrophic proportions. The Euro will likely remain intact in 10 years because of its inherent strength, contrary to popular opinion.

Institute and Meo - none of your arguments make much sense. First of all, an economy that is clearly not producing jobs like the U.S. is not a "thriving" economy. Secondly, high taxes and regulation existed in Europe prior to the crash and high tax, high regulation Germany, Switzerland and Sweden are doing well. The only obvious difference is the large cuts in spending and subsequent cuts in service in the periphery compared to those Eurozone countries that are doing well. Sweden is doing well because they have their own currency and were able to deflate rather than internally devalue.

As a non-economist on the sidelines it concerns me when someone of the statue of Paul Krugman takes the position that a three-fold increase in the stimulous was the solution to our problem. Is this not an invitation to open up the flood gates of spending and government debt? And what if the Swedish annointed economic diety is wrong? We're screwed. I would hope someone would publicly bring him to task. I would hope there is discourse on a position with potentially far reaching effect. Representing the majority of non-economic trained laymen I would hope there is discussion on the validity of the position. I have a horse in this race also! I read this blog hoping to make some sense out of a field with mystical formulas that some maintain have a bearing on whether I have a job or not. I hope it is not my ignorance in economics that led me to the belief that you're not a bunch of cool-aid drinkers and there really is a substantive difference between the ideas of Aziz, Rowe, and Noah.I agree the comments of Ferguson and Krugman sound like they both are spoiled elitists on a playground, but it seems important that the question of economic omnipotence be raised. After all, I seem to remember a man I though knew exactly what was going on sit in front of a Congressional sub-commitee and say "I was wrong."I need places like this to counter what I read at market oracle, hear on CNBC, find espoused by Roubini so as to come to my own informed conclusion. Leave Ferguson be. He may be right, he may be wrong, he may be Martian, but he needs to be a questioning voice.

I don't see why anyone should leave him be. He's a pompous prick who's a walking advertisement for the phrase "a little knowledge is a dangerous thing." I mean, where, is the hyperinflation he was talking about? the soaringinterest rates? He made solid, falsifiable predictions one way Krugman the, other. Turns out Krugman was right and he was wrong. No ondenies his right to say what he wants - but we have a right to say he's a, proven charlatan and intellectual fraud, too.

Accepting your premise that they are both spoiled elitists, one of them wants to put people back to work now, even if it means higher taxes for the elite later, and the other wants to keep taxes low on the elite even at the expense of mass unemployment. That's a pretty significant difference.

@Rothosen: What I can't see is how you've missed THE ENTIRE INDUSTRY that's been trying to "bring [Krugman] to task" for years. Now, whether they've failed because their fundamental picture of the way the world works is myopic and incoherent, or because they just can't seem to get out of their own intellectual way is an interesting question (I lean toward the former). Regardless this particular brand of Twit Olympics has been at it for years, and has got nearly nothing to show for it.

'And what if the Swedish annointed economic diety is wrong? We're screwed.'

And what if the Swedish annointed economic diety is correct? Then we're screwed now.

See how that works? Just because a decision has high stakes doesn't mean that sin of omission is any lesser than the sin of commission.

How about we investigate the issue and try to make the most informed decision rather than cowering in fear and hiding under the delusion that not doing anything is always and ever preferable to doing something?

Life don’t work that way. As has been explained, we’re screwing ourselves now out of the misguided fear we’d be screwing ourselves later. Seems really stupid when you also consider we’re not promised tomorrow.

The reason that we know that everything you post is incorrect Rothosen is that we have a relatively recent experience in a very globalized economy that we can see what happened. UK and US tried austerity after the start of the mess in 1929 - France didn't. France came out better from both a debt and deficit standpoint until they too embraced austerity. The US then tried stimulus from 1933-1937. For that entire period the economy rushed back towards capacity - then in 1937 we turned of the stimulus and the economy sank back into recession. During this entire time we did as little as possible in the US - and it still was successful. Then we turned the gas on for real in 1939 and bang - depression over. It didn't matter what kind of spending took place, what mattered is that the private sector was able to unwind their debt and that the economy was restored to self-sustaining. And it took less than 30 years to pay off that debt - which was MUCH higher that our debt is now as a fraction of GDP. Te reason we know you are wrong is 1. history and 2. math.

The problem with Ferguson is that although he's a non-economically trained layman like yourself, he likes to claim expertise even though he shows his complete ignorance of the subject every time he addresses it. If all he did was modestly question things as an outsider, the reaction wouldn't be the same. And I'm sure Krugman would get a similarly negative reaction if he used his position as a prize winning economist to write column after column claiming that global warming was a fraud and all the climate scientists were wrong.

There are of course legitimate differences amongst economists about issues like how large the stimulus should have been, whether it should have been larger or smaller, what fiscal mutilpliers would most apply, or whether everything is too dynamic for the concept of a fiscal multiplier to even be of any use.

As for your concern about government debt, it really comes down to whether you believe stimulus creates new economic activity, and especially whether there are any lasting effects. With interest rates below 3%, if stimulus is able to induce new economic activity and prevent even a very small recession-induced increase in persistent unemployment, it would make the debt burden less, not more (as Brad DeLong has pointed out). The increases economic activity would create new tax revenues greater than the new interest costs.

There are even those who take the position that spending in a recession should be financed by printing money, and neither debt nor taxes are ever really needed until you have a need to slow down economic growth due to overheating wages (from a shortage of workers available to meet overheating demand). This in a nutshell is the MMT view, and in theory it really only seems to break down when there is risk of a currency crisis.

Ferguson isn't a good historian. He lets his personal biases color how he interprets historical sources: http://hyperplanes.blogspot.com/2013/05/niall-fergusons-gay-problem.html

I read much of Ferguson's historical work before I realized what a wacko he is. I'd say his main defining trait is that he loves to be radically contrarian and to shock readers with facts that overturn their beliefs about something. His problem is that these contrarian facts are always poorly sourced and usually wrong.

"I hear you're a very good historian."How good of a historian can he be when he doesn't realize that the economic situation of the world radically changed after September 2008?

He criticizes Krugman for saying positive things about the European economy in January 2008, and then in December 2008, Krugman calls Europe an economic mess. Hmm, Niall (historian), what happened between January 2008 and December 2008? Anything?

On Morning Joe the other day, Ferguson (and Joe) were mocking Krugman for being in favor of dealing with the deficit under Bush and against dealing with the deficit under Obama. Again, what changed? To the "braintrust" of Scarborough and Ferguson, it was the political party of the President, not the collapse of the economy, soaring unemployment, and interest rates at the zero lower bound.

If a doctor said in January a patient was in excellent health and then he dies 9 months later of cancer is a sensible retort to say: "Helloooo, look what happened in between January and December, Anything?".

The sad truth is Krugman was as oblivious to the Euro troubles as he was to the troubles of the US economy, he had no clue what was coming, although osme people did, because they looked at debt, debt-to-income ratios, leverage and other fluff gloriously absent from his framework and models.

PeterP - Krugman started talking about the actual problem (shadow banking and decoupling risk from origination) in 2005. How is that "clueless?" Seriously - do any of the Krugman haters actually read the man's blog or any of the things he links too? Sure, he is strident and makes mistakes on occasion - but seriously, is that the measure you would like to hold yourself too? I saw it coming when a bank offered me an interest only loan and didn't disclose to me that their idea of interest only was actually capitalizing interest to buy a house that I would be able to actually afford in exactly never.

"If a doctor said in January a patient was in excellent health and then he dies 9 months later of cancer is a sensible retort to say: "Helloooo, look what happened in between January and December, Anything?"

Yes, the patient was frog-marched through a nuclear-waste site called JPMorganAIGGold_MansacksS&P,CountrywideMortgage-Land.

Ferguson's piece does raise one important question, which is how the hell did the Eurozone not collapse over the past three years? As someone who had precisely the same take on the issue at the time as Krugman, I'm mystified.

Seems to me the fear of taking that radical step and the political appeal of being part of a larger, relatively wealthy and democratic system, as opposed to being 'out there' on your own, are the key points. Risk-aversion keeps a lot of us from doing things that appear economically sensible but require substantial changes in how we make a living.

It was a contained crisis among the Eurozone weaklings (spain,Portugal, greece, italy). The worse that could have happened it that a few of them wooud have been ejected, but that woud have created a host of new problems. Like TARP, the bailouts seemed to have been a huge success and those who bought PIIG bonds made a killing.

It's worthwile to remember that economics is a subset of political economy. Krugman is Kruguthulu when it comes to macro - destroyer of worlds, but a mere mortal when it comes to politics. (Granted he and DeLong were both prescient when it came to the GOP and the closing of the conservative mind. They both take an admirable joy in mixing it up with the Internet hive mind, like Sherlock Holmes on Elementary last night.)

Meo - you would be onto something were it not for the fact that on the economics (what actually happened to the debt and economy of the periphery) he was exactly right. He just didn't think the PIIGS would continue to endure pain forced upon them by Germany.

I think Brad DeLong's trademarked "Stupidest Man Alive" was motivated by the anti-Krugman rants from Donald Luskin. If Niall Ferguson wants to lower himself to be the annoited Luskin II - he is welcomed (but not adviced) to do so.

Not so. It is not a requirement for the position that the stupidest man alive make incorrect choices every time. He need only make them more frequently or with a greater degree of stupidity than the next most stupid person. So in this imperfect world he does not provide the value of predictability.

Besides, very rarely does any situation have only 2 diametrically opposite solutions. So even Institute of Nonsensical Understanding assumption that the stupidest man was always wrong is true, at best the stupidest man's value would only lie in eliminating one of the many choices we face.

Noah, Did you notice the Krugman reference to this post confirms Niall's view. Yes man indeed. You got to admit defeat on this one. Everyone gets you are his sidekick and it is a compliment anyway. You lost fair and square. And I would actually suggest you take this post off as this is one of the worst you have made here. You actually are suggesting that it is ok to insult people, call them names, accuse them of being people with bad intentions, always wrong etc etc just for fun.

And the Krugman link to this means that is the reason he does it? It is ok for a young AP from a random University but for Krugman too?

"You actually are suggesting that it is ok to insult people, call them names, accuse them of being people with bad intentions, always wrong etc etc just for fun."

Krugman doesn't do it just for fun. He reserves it for people who disagree with him without doing any work or showing any reason why he's wrong except to increase the vehemence of the argument he just shot down.

Myself, I think we're in this stupid shutdown/default cesspool precisely because we have been waaay too polite to people who basically disagree with our American mores.

And you forget. Those three posts were exactly about History. It was the concise history of the biggest and most surprising things Krugman got wrong in the last decade. I have seen liberals have a hard time actually reading through any criticism against them.

Yeah, some serious rock crawlers here. Krugman is great, because he has -- to all intents and purposes correctly by all current evidence -- identified the main problem is that "normal" economic rules do not apply at the zero-bound (as did several others), and that without some form of stimulus (print money, borrow-and-spend money) we are only going to crawl our way out over the long haul, having destroyed the possibilities of millions not only in the U.S. but around the world.

Now, as to the precise predictions about how this might happen, he has been wrong about the politics, which is had not only admitted but has commented on how strange it is and that he certainly doesn't understand.

Economically, however, there are many theories that attempt to place the locus for the lack of rebound on any problem other than the lack of aggregate demand due to a dim view of the investment environment and the financial drag of the financial sector. None, however, do anything other than to try to make a persuasive argument against the default view: that aggregate demand compounded by policies that reduce the money supply in one way or another are the main problem, and that they are **specifically a human catastrophe because they could be fixed.**

The problem with Ferguson is that he, unlike a really talented, creative person like Tyler Cowen (for one example), cannot make any counter argument without accidentally making a huge mistake or three. Cowen works very hard to tease out possible items that indicate that aggregate demand is not quite the culprit, or that austerity is a confused word, or... but at least he's creative and tries.

Ferguson? Not even worth the candle, and that's the problem. He works hard -- he MUST -- work hard not to learn from any of these events. He'd be fine if he just stopped making economic arguments and said that he didn't like debt on principle and thinks that our current level of inequality and lack of mobility is fine. Hey... that'd be ok, right?

Why does everyone, i.e. the media, give this guy Ferguson a platform for his rants? It can't be his opinions as they aren't that interesting. Or his knowledge as he isn't more knowledgeable than the next guy they could get. He does, of course, present the British view which they always insist must be heard by all. Maybe if we ignore him he will just go away. That is, back to Britain.

It's a small point, but you say that "my own occasional Ferguson-bashing (see here and here) was motivated each time by the peculiar glee that comes from giving a really bad article the thorough point-by-point thrashing that it deserved."

Yet one of the links you provided begins with the sentence: "I have been known to tease a fellow blogger or two, but there is really only one writer who makes me truly mad, and that is British historian Niall Ferguson."

Lars P Syll over in Sweden respond to Niall F on his blog"Niall Ferguson has done it — again"larspsyll.wordpress.com/2013/10/11/niall-ferguson-has-done-it-again/11 October, 2013

"Ferguson hits out at Paul Krugman yesterday for having a nasty online behaviour.

Look who’s talking!

This is really überpathetic — coming from a Harvard professor who only a couple of months ago made bizarre and offensive remarks about economist John Maynard Keynes at an investment conference in California, saying that Keynes’ economic philosophy was the result of Keynes not caring about future generations because he was gay and did not have children.

If I extracted correctly the cogent point against my post it was that history shows either debt increase, or monetary increase in massive amounts is warranted and beneficial. Not knowing the level of gold purchases/sales by France in 1929 ,or interest rate policies, and not knowing if policies in a gold backed era have similar effects as rthose in a strictly fiat currency globalized age I will leave that example alone and ask this:

Hasn't Japan done exactly whay seems to be proposed here on a massive level for twenty years? Are the results what are expected? They certainly have massively increased their debt and I would assume the total currency (m2?). So they now are at full employment and maximum productivity right? Or is the arguement here they also did not go large enough? Why is the Japan historical example not valid?

But you've missed Niall's main point which is really about civil discourse. Krugman's incivility is a problem, particularly from someone in his position. It stifles debate. It's unbecoming. And I don't think it enhances his view or reputation in the eyes of academics or policy makers (just ask Larry summers about that last one).

Niall's problem is that he thinks everyone should sitting around sipping sherry and being polite to him while he tries to be some sort of iconoclast. The problem is that (1) we are not sitting in a faculty lounge (2) we are not a bunch of dewy eyed co-eds who find him attractive.

In this bar, if you "sing" as badly as Niall does, the audience will start throwing rhetorical beer bottles. If Niall does not like it, he should get off the stage.

As a Brit (in fact, a Scot) resident in US academia, I can only plead: please don't tar us all with the Ferguson brush. The man is a twit, a twat, a bampot (Scottish: google it). I suppose that at some point he must have written some decent history, but his forays on economic policy would be merely laughable if her weren't able to trade on his Harvard affiliiation to spew his disinformation.

Although I'm late to comment, I got a laugh out of this post. Although Paul Krugman can be maddeningly rude to anyone who disagrees with him, he usually reserves this ire to people who are influential and he feels have bad ideas. It's a bit ironic of Niall Ferguson (although I like him somewhat) to accuse Paul Krugman of poor conduct.

Rather than comparing this blog's owner and his neo-Keynesian ilk to plovers on crocodiles, I think a more apt comparison would be ringworms on Krugman's sphincter, vying desperately for a crumb of Krugman's establishment cred.

One can't help but laugh at how liberals like the OP put themselves out as being for Main Street and the little guy, yet they support monetary policy that amounts to trickle down on steroids.